Member of the European Commission responsible for Internal Market and Services

Speech: Croatia: welcome to the single market!

Conference "How can Croatia benefit from the single market?"/Zagreb

1 March 2013

Dear Ministers,

First of all, let me thank the Ministry of Economy and the EU Delegation to Croatia for hosting this conference.

On July 1st, Croatia will join the EU and the single market.

This is the result of huge efforts made by Croatia over the last 8 years to adapt its economy. So my first message is to congratulate Croatia for this great achievement

Joining the single market will open up new opportunities for Croatian people and businesses. It will boost the Croatian economy – as it has boosted the economy of acceding countries in the past.

But there is more.

Croatia will have its say on key decisions taken by the EU. For instance on regional funds, energy and transport networks, the fight against climate change and external relations.

Above all, Croatia will become a Member of the EU family.

A family which has grown over the years, from 6 to 28 Members

A family which has succeeded in helping its newest or weakest members to catch up, while cherishing diversity

A family which has had its share of troubles but which has always managed to emerge stronger than before – this is what will happen once more with the recent series of crises.

A family which used to be divided by war, walls and barbwires and which has just been awarded the Nobel Prize for more than sixty years of peace

I have long thought that Croatia should be part of this family. And it is my belief that the family should one day include the other former Yugoslavian countries.

I know that this is not simple for countries which were at war 20 years ago. But France and Germany started the coal and steel community in 1951, only six years after the end of World War Two. And they now have strong economic and political ties.

The single market, Ladies and gentlemen, has been at the heart of this reconciliation process.

Through concrete steps, such as lifting trade barriers and giving workers an opportunity to gain experience abroad, we have tightened our links. And we have progressed from an economic community towards a genuine political union.

So what does the single market mean for Croatian citizens, businesses and government?

I – Let us start with the opportunities for people and businesses

There are many of them.

For a start, Croatian consumers will have access to more products. Of better quality. At a lower cost.

Since 1992 the price of airline tickets has fallen by 40% in the EU.

And roaming charges for mobile phone calls between EU countries have fallen through the floor.

Families wanting to buy a house or a new car should be able to borrow money at a far lower rate than today, thanks in particular to the free movement of capital.

Businesses will be able to sell their products and offer their services all over Europe.

In a market of 500 million consumers

In Croatia, 60% of the total exports of goods already go to EU countries. Being part of the single market will make it even easier for exporters.

Above all, Croatians will be able to travel, study, live and work in another EU country.

Free movement of workers might be introduced gradually in some countries. But craftsmen will be free to provide services in other Member states from day 1 of accession.

These freedoms are unique to the nations of Europe – no other group of countries has ever achieved this.

II – In addition to individual opportunities, the single market is also a collective opportunity for Croatia.

As a full member of the EU, Croatia will have its say on an important question: what kind of single market do we want for the 21st Century?

The Single Market was born in 1992. Twenty years ago.

Since then, it has achieved great results. For instance, the single market has created 2.7 million new jobs in the EU between 1992 and 2008.

However, since 2008 Europe has been in crisis.

Despite a few good signs, the latest economic forecast shows that recovery is coming too slowly. We do not expect much more than zero growth this year in the EU.

In some of our nations, one in two young people on the labour market is unemployed.

Besides, we need to adapt the single market to phenomena which simply did not exist in 1992. Such as e-commerce, modern venture-capital and the new financial instruments.

In short, we need to use the single market as a platform to build our highly competitive social market economy.

What does that mean in practice?

First, we need to use the single market as an engine for innovation. For example through the European unitary patent which has just been agreed. It will reduce the cost of protecting innovation in the whole EU by 7. And it will be a great asset for Croatian businesses.

Another way of developing innovation is to make life easier for SMEs, which are responsible for 85% of net job creation in Europe. As part of the Single Market Act, we have just proposed measures to reduce administrative burden, improve access to funding, including through venture capital and ensure SMEs benefit from a genuine digital single market.

Second, we need to tighten social and territorial cohesion. Every single European and each single territory is necessary if we want to build a modern and efficient single market.

Structural funds should continue to be targeted at projects that really make a difference at local level.

Social entrepreneurs, who have other goals than simple financial profit, should be encouraged. For instance through better access to funding. We have made proposals to develop social entrepreneurship funds.

Third, we need to learn all the lessons from the financial crisis. And put finance back at the service of the real economy. For more than 3 years now, we have proposed around thirty measures, addressing all the key commitments agreed at the G20. Our goal has remained unchanged: no financial player, no financial product and no financial market should escape effective regulation and supervision.

And let me add that clear rules and transparency must not be limited to the financial sector. Being part of the single market also means having such rules in place in fields such as public procurements, intellectual property and corporate governance.

Finally, we need to strike the right balance between fiscal consolidation and growth-enhancing measures.

In some EU countries the amount of debt accounts for one year of GDP. Digging debt and deficits further is clearly not an option. We cannot simply pass the burden to the next generation. Therefore we need common rules, monitoring and more coordination in the EU.

But at the same time, fiscal consolidation must not deter growth. We need to implement the rules in a smart manner. For instance by looking at structural rather than nominal deficit targets and by focusing on medium-term objectives. And by implementing our growth and competitiveness agenda, at national and EU level.

Ladies and gentlemen,

With the Single Market Act and our ambitious financial regulation agenda, our goal is to pave the way for a smarter, more inclusive and more sustainable growth in Europe.

This is an on-going process, as highlighted by the Single Market Act II, which we presented in October 2012 to open up new opportunities for people and businesses in four crucial areas: energy and transport networks, mobility across borders, digital economy and social cohesion.

On all these reforms, the decisions are not taken by a group of European Commissioners in their Brussels’ headquarters.

The Commission has a well-defined role: to make proposals and to implement what has been decided.

But the Commission doesn’t actually make the decision. This is the role of the European Parliament and the Member States, including, from July 1st, Croatia.

I look forward to work with Croatian representatives and listen to their fresh ideas on the single market and the future of Europe.

But it is also of the utmost importance that Croatian people are directly involved.

Next year, for the first time, you will be in a position to choose Members of the European Parliament. I believe this election should be the opportunity for a wide debate on Europe and the single market.

I encourage each one of you to take part to this debate and help shape the future of the single market.